One gap filled, one still yawns

Comptroller's report says Colonie needs to fix highway fund shortfall

Updated 10:38 pm, Tuesday, September 4, 2012

COLONIE — While the town has fixed the deficit in its general fund, it now has a half-million-dollar hole in its highway budget, the state comptroller's office said.

Last month, the town hailed its independent auditor's report, which found Colonie ended the year with a surplus of more than $700,000 in all its funds.

But in a new report, the comptroller warned that the town now needs to address a shortfall of $576,000 in its highway fund.

"This occurred primarily due to overexpenditures of over $1 million including overexpenditures of $815,000 for street maintenance and $361,000 for employee benefits," the report says.

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State Comptroller Thomas DiNapoli's office also said the town does not provide enough information for residents and Town Board members to understand its budget.

"The town's 2012 proposed budget document did not contain sufficient information to make it useful, either in assisting town management in planning and monitoring the financial operations of the town or in providing the public with enough information about the town's annual financial plan to allow for meaningful input at the budget hearing," the audit says.

The document included only estimated revenues and appropriations from the 2011 proposed budget and the proposals for 2012, the report says. It did not include any information about actual revenue and expenses. It also did not include an adequate budget summary message.

"As a result of the inadequate budget format, the board lacks sufficient information for budgetary decision-making and monitoring," the report said. "It also limits the understandability and transparency of the budget for town taxpayers."

Sara Wiest, a spokeswoman for Supervisor Paula Mahan, said the review ended July 12, 2011, before the fiscal year ended and the 2012 budget was presented.

While acknowledging the highway fund shortfall, she said, that loss is included in the calculations of the total surplus. Colonie ended 2011 with a fund balance for the first time since 2005, the independent audit confirmed last month.

While the town and comptroller's office disagreed on when that shortfall originated, Wiest said it will be eliminated this year.

A budget summary was included with the 2012 budget, which was done after the comptroller's auditors left, and one had been included with the 2010 spending plan, Wiest said. It was left out for the 2011 budget because a state early retirement incentive had the finances in flux, she said.

Colonie's government had problems with revenue shortfalls or overexpenditures in 2009, 2010 and 2011, the report said, "and these shortfalls and overexpenditures have been funded through various one-shot revenues which cannot be counted on in future budgets."

The report warned the town is in danger of falling back into financial chaos.

"The board has consistently overbudgeted for revenues such as the sale of equipment, sales tax and mortgage tax and underbudgeted for expenditures such as employee benefits for retirement and health insurance," it said. "If these budgeting practices continue, there is a risk that the financial condition of the general fund could decline with a return to the poor financial condition experienced in prior fiscal years."

While the report says the town overestimated sales tax revenue, Wiest said, the town took in $1 million more in sales tax than budgeted for 2012.

The comptroller's report wasn't all bad news for Mahan. At the end of 2008, it said, the town had a general fund deficit of $29.3 million and a landfill fund deficit of $7.6 million.

"The town's financial condition has been improving since 2008 due to increases in the tax levy and budget restructuring," the report says.

In a written reply, Mahan said the town created a budget committee, including board members and department leaders, in 2008 and adopted a line-item budget in 2009. The board receives monthly reports on how much is spent compared to the amount budgeted.

She also argued the highway fund shortfall was left over from the prior administration, while the comptroller's office said the fiscal gap was her responsibility.